Saturday, June 07, 2003

But "economists" tell us not to worry -- " A stabilization in the jobs market and steady income growth will stave off borrowers from falling into a deep hole," they say. Hmm.

Steady real income growth is nowhere in sight; I suspect it is only the boom in housing prices that is keeping Jane and Joe Middle America feeling rich enough to spend spend spend (indeed, "many cardholders who are also homeowners have paid down their credit card bills with money freed up from mortgage refinancings, Moody's senior credit officer, William Black, told Reuters." -- but then why are they falling behind on the credit card payments?? Something doesn't add up here.).

A stabilization in the jobs market? And when is that supposed to happen? Unemployment went up to 6.1% in May, but really higher due to BLS funny business as repeated in this blog. Nobody thinks this is the peak, either. Unemployment will probably go as high as 6.5% before coming back down, and that's the word from the optimists.